The S&P 500 spent the day searching for direction near 2,950, just below last week’s record level as several sectors saw gains. Sitting out, however, was the healthcare sector, weighed on by news that regulators are forcing the hand of Bristol-Meyers (BMY), which will sell a top drug in order to get the nod to merge with Celgene (CELG). Sentiment could be at a crossroads as tension between the U.S. and Iran continues and the meeting between China’s President Xi Jinping and U.S. President Donald Trump this week at the Group of 20 summit will represents a crucial trade pivot point.
ECONOMIC EVENTS: In the U.S., the Chicago National Activity index for May rose 0.43 points to -0.05. The Dallas Fed manufacturing index dropped another 6.8 points to -12.1 in June, which was well below expectations. In White House news, U.S. President Donald Trump is signing an executive order for "strong sanctions" on Iran, according to Bloomberg.
TOP NEWS: Shares of Bristol-Myers Squibb and Celgene slipped a respective 7.4% and 5.5% after announcing that Bristol-Myers is planning the divestiture of psoriasis treatment Otezla in order to allow the Celgene merger to close on a timely basis in light of concerns expressed by the U.S. Federal Trade Commission.
In other M&A related news, Eldorado Resorts (ERI) announced an agreement to acquire Caesars (CZR) for $12.75 per share in cash and stock, or a total consideration of $17.3B. Following the announcement, Carl Icahn said he is "pleased" with the planned merger. Caesars shares surged 14.5% after the news while Eldorado closed 10.6% lower. Meanwhile, Nanometrics (NANO) and Rudolph Technologies (RTEC) have agreed to combine in an all-stock merger of equals, while 1st Constitution Bancorp (FCCY) agreed to acquire Shore Community Bank (SHRC) for $16.54 per share.
MAJOR MOVERS: Among the noteworthy gainers was PCM, Inc. (PCMI), which jumped 42.9% after entering into an agreement under which Insight Enterprises (NSIT) will acquire PCM for $35 per share. Insight was fell fractionally after the news. Also higher was Krystal Biotech (KRYS), which rose 41.3% after the company announced positive results from its GEM-2 study of KB103 in patients with Recessive Dystrophic Epidermolysis Bullosa as well as a positive update on the GEM-1 Phase 1 trial of KB103.
Among the notable losers was Sally Beauty (SBH), which tumbled 16.7% after Amazon Business (AMZN) launched the Amazon Professional Beauty Store. Also lower was Wabtec (WAB), which fell 6.4% after Buckingham analyst Matthew Brooklier downgraded the stock to Neutral from Buy.
INDEXES: The Dow rose 8.41, or 0.03%, to 26,727.54, the Nasdaq lost 26.01, or 0.32%, to 8,005.70, and the S&P 500 declined 5.11, or 0.17%, to 2,945.35.
